Done deal: Santos (ASX:STO) and Oil Search (ASX:OSH) merger becomes effective

The ASX 200 energy giants’ merger will create an industry heavyweight.

| More on:
Two Santos oil workers with hard hats shake hands in the foreground of oil equipment.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It’s official.

The long-awaited merger between S&P/ASX 200 Index (ASX: XJO) energy shares Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH) just became effective.

Below we look at the joint merger announcement released by Santos at lunchtime today.

Santos and Oil Search merger now effective

Today, Santos advised that its merger with Oil Search is officially effective. This follows earlier approval from Oil Search shareholders, and a green light from the National Court of Papua New Guinea yesterday.

Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share they hold on the record date of 14 December.

The market cap of the newly merged ASX 200 energy company is estimated at $22 billion.

Today marks the last day of trading on the ASX and PNGX for Oil Search shares.

New Santos shares will start trading on the ASX and PNGX on a deferred settlement basis next Monday 13 December. They will begin trading on a normal settlement basis on 20 December.

What did management say?

Commenting on the merger becoming effective, the Santos chairman Keith Spence said:

The merger combines two industry leaders to create a regional champion of quality, size and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets.

We look forward to integrating our businesses to create one high performing team – with a vision of becoming a global leader in the energy transition.

Santos CEO, Kevin Gallagher, added:

Santos and Oil Search are stronger together and will have increased scale and capacity to drive a disciplined, low-cost operating model and unrivalled growth opportunities over the next decade.

The merger creates a company with strong and diversified cash flows, providing a platform to deliver shareholder returns and successfully navigate the transition to a lower carbon future.

Additionally, the merger builds on our industry-leading approach to ESG through the combination of Santos’ leading carbon capture and storage capabilities with Oil Search’s social programs in PNG and North America.

How’s the Santos share price tracking today?

Santos and Oil Search shares have fallen during intraday trading on Friday.

At the time of writing, the Santos share price is $6.46, down 2.49%. The Oil Search share price is $4.03, down 2.66%.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Mergers & Acquisitions

Four PointsBet customers and football fans put heads in hands and look disappointed while watching television
Technology Shares

Betmakers share price slips despite new $20 million deal

The betting technology provider has amended a key contract. Here are the details.

Read more »

One young boy jumps off a step ladder and is captured mid-air about to land on a seesaw where his friend is standing with a wide smile on his face looking at the camera and holding his thumbs up as though he is excited for the ride to come. Both young boys are wearing business suits.
Mergers & Acquisitions

Nearmap share price jumps 30% on takeover news

The Nearmap share price rallied 33% to $2.01 in early trade on Monday, but remains below the bid price.

Read more »

A frustrated young woman shopper holds her hands up with a pained, annoyed expression on her face as she stands next to her trolley in a grocery store and examines the stock offerings on the shelf in front of her.
Mergers & Acquisitions

Woolworths share price slides following MyDeal ACCC nod

MyDeal shareholders will vote on the proposed acquisition next month.

Read more »

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Consumer Staples & Discretionary Shares

iSelect share price explodes 75% on takeover news

The iSelect share price is sky high after the company revealed a takeover offer from the owner of www.comparethemarket.com.au.

Read more »

Two men in business attire play chess.
Resources Shares

OZ Minerals ‘completely in play’: Broker on BHP takeover bid

BHP's bid for OZ Minerals may not be over...

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Mergers & Acquisitions

Macquarie share price slips despite rumours $3.7 billion acquisition imminent

French company Veolia is divesting itself of the assets to resolve antitrust concerns raised in May by UK regulators.

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Mergers & Acquisitions

The OZ Minerals share price is rocketing 35% after BHP bid

Despite knocking back a takeover bid, OZ Minerals shares are going nuts.

Read more »

An investor looks happy holding a finger to his computer screen while holding a coffee cup in a home office scenario.
Mergers & Acquisitions

BHP share price lifts as $8.3b takeover bid rejected

The iron ore giant proposed to snap up its ASX 200 copper-focused peer for $25 per share.

Read more »